Tax Liens...The Right Path?
Not only am I a newbie, I am a VIRGIN newbie. Don't even know what a tax deed looks like. Recently a friend convinced me to attend a seminar proclaiming the virtues of tax lien certificates. For just a few thousand dollars I would learn all the money making techniques I would need to become a successful investor. The mans name was Sean Higgins of Optimum Achievement Corp. I kept an open mind. I did not purchase the course. I did decide to research it further and find out as much as I could first. That is how I found this website (an excellent site btw). The impression I have formed is that the financial reward of TLC's do not justify the time / work involved. There seems to be few opportunities to acquire really profitable property, along with the intense competition from far more experienced (read ANY experience) individuals, not to mention the large investment firms. I can't see TLC's being much more than a hedge against inflation. Sorry to sound so negative. Actually I'm quite excited and determined to become self sufficient. It's just that I have zero experience in any form of real estate investing and virtually no financial resources to get started with. That makes me an easy mark for get rich quick scam artists. I have no room for errors and wind up in a deeper hole than I already am. I am intrigued by the idea of TLC's, I just wonder if that is the right path for me. I am grateful for any insight, advice, questions or comments you good folks may have.
Thank you very much,
BoReD 
Bored--(TX)------------
I think your assessment of the tax liens investing situation these days is pretty accurate. The only thing is that there are still some tremendous opportunities for those who are willing to learn and put in the effort. So, in my opinion, they can definately be worth it if you can find the right places and the right tactics to make them work.
Better than tax liens, in my view, are acquiring properties cheap with tax deeds. Unfortunately, there is a lot of competition for them these days also. TX happens to have strange sales: you get a deed, but the former owner has the opportunity to redeem the property. If they don't your deed is automatically good, you don't have to foreclose to get it. Also, if the property is redeemed, you get a minimum 25% return on your investment/year.
I'd never try the high-populations counties. But TX has a lot of low-population counties and it might be possible to get some good deals there. Only after studying the law and how the whole thing works, of course.
And, you mention becoming financially independent but you don't save your money. You probably will never become self-sufficient unless you cut down your consumer spending and start savings a lot of your income for an investment resource. Try to save 20% of your income regularly. Then you have some chance of becoming financially stable.
My grandda Albert Starr was born and grew to maturity in TX then left as a young man and homesteaded in Nebraska. I've visited where he grew up in Texas and of course have been to his ranch in Nebraska many times, both when he was there and when my Uncle ran it. I think he would have been better off to stay in TX, it's a lot nicer than the sandhills of NB, in my opinion.
Good Investing**********Ron Starr*********
Bored,
This seems to be my night to agree with Ron Starr.
A a newbie, I am impressed that you have picked up on the issues that surround tax lien investing. Investing in tax deeds is the way to go and Texas is as good a state as there is to invest in tax deeds.
When I was last in the suburbs of Houston, many houses could be purchased at the tax auctions for under $6,000. You can not go wrong when buying at that level. Now, the rural counties do offer the better values. Also, check the resales.
Good luck,
Mitchell Goldstein[ Edited by JohnLocke on Date 02/03/2004 ]
Thanks Ron and Mitchell for your input. Clearly, a thorough knowledge of all facets of real estate is needed. Perhaps my first investment should be in one of these seminar / consulting programs I see advertised. At least then I can gain a working knowledge at investing and can better plan a successful strategy. I can then come back here with more informed questions and ideas.
Thanks Again,
BoReD
P.S. I still reserve the right to ask stupid questions in the meantime.
Bored-------------
I do not recommend high-priced seminars or "programs." I recommend you read books from the local public library, buy at second hand and thrift stores, and study online.
I highly recommend John Beck's "Free and Clear" program which is cheap and covers the whole country. Look at his www.johnbeck.net website.
Good Investing**********Ron Starr**************
Bored,
This is a good question. I have seen many, many REI speakers and I have purchased dozens of their books and tape sets. They all have good input and the money is well spent.
However, forums such as this can help you a great deal in directing your zeal. I have done a decent amount of research into the differing ways of investing in real estate and the way I like to invest is mostly determined by my own likes and dislikes, my own natural abilities. So, my own proclivities matter more than does the merits of any particular investing methodology. For example, if you are very handy, look at rehabbing.
Now, be clear, I gravitate to buying tax deeds and using the option when a purchase is not warranted. But I know how to do a rehab, as I have done many. I know about foreclosures, subject to and notes. I can wax eloquent on the differences between houses and multies and commercial, etc.
All this is to say that you can go to a forum dealing with any of these topics, read the archives and get a really good education. You need not spend thousands on a weekend seminar, which is nothing but a generalized data dump.
In the forums you will find the items needing to be overcome with subject to, or the difficulties with short sales, etc. Here in the tax lien and tax deed area you will see that every state has its own way of doing things. I have found that every county has different rules. No seminar speaker or program can deal at that level. Only your good preparation, your common sense and experience will carry you through.
Should you feel the need for expert input, I would first define the specific area of investing interest and then find a personal mentor or coach. This person has experience in your decided area of expertise and will be your best spent monies.
Best of luck,
Mitchell Goldstein